On the path to full recovery, Vietnam is set to perform very well this year
With its steady economic growth forecast at almost 7 percent in 2016, Vietnam is considered one of the fastest-growing markets in the world, reports Bloomberg.
According to the report, soaring domestic demand and rising foreign direct investment (FDI) are among the main contributors for the impressive economic reform.
With the stellar economic outlook, the country’s stock market has been attracting foreign investors. Last year, the Vietnamese government even drafted a five-year plan to raise the per capita gross domestic product from USD3,200 to USD3,500 by 2020.
On the real estate front, Vietnam also made headlines in 2015 when it finally implemented its game-changing policies to ease foreign ownership rules in the residential market via the Law on Residential Housing (LRH).
Now that the Vietnamese market has a reputation of openness, property experts believe that 2016 will become a solid year for the real estate industry, with a flurry of investment opportunities and developments.
Mauro Gasparotti, executive director at real estate firm Alternaty, said that Vietnam is a stark contrast to its regional counterparts, which are encountering a rough period: Singapore for its cooling measures, Malaysia and Indonesia for their currency depreciation, and Thailand for domestic woes.
“Vietnam has come through an extended period of consolidation, and looks poised to lead the regional real estate markets over the next two to three years,” said Gasparott, who also noted that many regional experts at the first Property Report Congress 2015 voted for Vietnam as the top property investment market choice for the new year.
Developers in Vietnam are optimistic that the rapid urbanisation will further stimulate the domestic market, provided that infrastructure improvements and detailed guidelines on investment are laid out.
Phan Thanh Huy, CEO of real estate development firm Novaland Group, winner of the Best Developer award at the first Vietnam Property Awards 2015, told Vietnam News: “The property market has achieved significant growth in recent years, as proved by the transaction volumes and rising prices.
“Along with housing, the retail [shopping]and office segments are also expected to attract interest from developers. Demand in these segments, especially in Ho Chi Minh City, will rise sharply, thanks to the demand from foreign investors who keep pouring money to start or expand their business in Vietmam,” he added.
The real estate executive also noted that the support from the banking sector that will enable more consumers to buy residential properties in 2016 would help the industry to make a significant recovery.
Analysts, including Marc Townsend of CBRE Vietnam, noted in late 2015 that the full impact of the policy changes in the country could take at least one year after the implementation of the LRH, so it could be a few more months before any significant surges are seen in the market.